People in the UK who currently have no retirement savings can expect to retire anytime between 74 and 86, calculates Standard Life.

The government's decision to raise the state pension age in the future, potentially to 68, means many people who expect to rely on state benefits in retirement will in fact see their income fall as low as 21 per cent of pre-retirement earnings.

"The holy grail of retirement saving is to fund an income worth two-thirds of your pre-retirement income," said Andrew Tully, senior pensions policy manager at Standard Life. "If people rely on the state in the hope or belief that the Government will bail them out, they will either have to retire on a basic income or simply face the music and defer retirement until much later.

"Most people in the UK would like to retire at age 65 or even earlier. To achieve this goal with a decent retirement income, private saving is essential. The old adage of it pays to start saving early has never been truer."

As an example of the state of retirement income, Standard Life has calculated that a man aged 27, with a salary of £25,800 per year will retire on 34 per cent of his pre-retirement income - £170 per week in state benefits, assuming that he has no additional retirement savings and retires at 68. However, if he chose to defer retirement until 79, he would instead receive 66 per cent, or two-thirds, of his pre-retirement income due to annual increases to state benefits because they have been deferred.

"These figures paint a stark picture of retirement reality for many people in the UK today," Tully added.

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